Date: 20060612
Docket: A-381-05
Citation: 2006 FCA 216
CORAM: NOËL
J.A.
EVANS J.A.
PELLETIER
J.A.
BETWEEN:
RAY HAUSER
Appellant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT
NOËL J.A.
[1]
This is an
appeal from a judgment of Rip J. of the Tax Court of Canada (2005 TCC 492)
dismissing the appeals brought by Mr. Hauser (the "Appellant")
against assessments made under the Income Tax Act, R.S.C. 1985 (5th
Supp.), c. 1 (the "Act"), with respect to his 1997, 1998, 1999, 2000
and 2001 taxation years.
[2]
These
assessments levy a tax on the Appellant on the basis that he was a resident of Canada throughout these years. The Appellant
maintains that his country of residence was the Bahamas.
Relevant facts
[3]
The facts
are fully set out in the decision under review. The brief summary which follows
highlights some of the more salient points.
[4]
The Appellant
was an Air Canada pilot, based in Toronto.
From 1992 to 1995, he worked in Florida as a flight instructor for Air Canada. Before starting this post,
he sold his house in Cambridge, Ontario, and his family
moved with him to Florida. Following a divorce in 1996,
he returned to Canada and rented an apartment in Cambridge. In May 1997, after receiving
permission from the Bahamian immigration authorities for a residence permit,
the Appellant gave notice to his landlord that he would vacate his apartment at
the end of July 1997.
[5]
On April 17,
1997, he remarried. According to his wife, it was understood that the couple
would live in the Bahamas. She, therefore, resigned
from her job with the Ontario Ministry of Environment. In June 1997, the couple
signed a lease with an option to purchase a fully equipped townhouse. Around
July 29, 1997, the couple moved to the Bahamas.
[6]
Before
leaving the country, the Appellant wrote to the Ontario Health Insurance Plan
(OHIP) authorities to inform them that he was moving out of the country and to
cancel his coverage. He also shipped his household goods, his car and his boat
to the Bahamas. Although he opened a bank
account in the Bahamas, the couple kept a joint bank account in Cambridge, registered at the Appellant’s
mother-in-law’s address, where the Appellant’s salary was deposited and used to
pay personal expenses. During those years, the couple spent the Christmas
holidays in Canada; the Appellant’s wife spent
much of the hurricane season in Canada.
[7]
At all
relevant times, the Appellant remained a pilot with Air Canada. He held a Transport Canada
licence and belonged to a Canadian chapter of an international pilot’s union.
His work base was Pearson International Airport in Toronto ("Pearson"). Air Canada required that the Appellant
be in Toronto 24 hours before he was
scheduled to fly. Air Canada also required that he be
within 2 hours of Pearson while on reserve.
[8]
While on
call, the Appellant usually stayed in a bedroom at his mother-in-law’s home
where he kept "seasonal" clothing, as well as an Air Canada uniform.
Sometimes, however, the Appellant stayed with his mother and father or friends
in Cambridge. While in Cambridge, he was often accompanied by
his wife.
[9]
The Tax
Court Judge found as a fact (Reasons, para. 44) that the Appellant was present
in Canada in each year on the following
number of days:
|
Year
1997
(after July 29)
1998
1999
2000
2001
|
Days
99
215
113
184
142
|
Decision under appeal
[10]
The Tax
Court Judge noted at the beginning of his reasons the Crown’s concession that
the Appellant had established residence in the Bahamas as of August 1997. However, he went on
to find that the Appellant did not thereby cease to reside in Canada. According to the Tax Court
Judge, the Appellant maintained extensive ties with Canada which supported the
conclusion that he continued to reside in Canada during each of the taxation years in
issue.
Alleged errors
[11]
The Appellant
submits that the Tax Court Judge committed an error in principle in failing to
conduct a comparative analysis of the ties which he maintained with Canada, and those which linked him
to the Bahamas. According to the Appellant,
such an analysis if conducted on a qualitative basis, would have led to the
conclusion that he has substantially greater ties with the Bahamas and that
this was his country of residence to the exclusion of Canada.
[12]
In this
respect, the Appellant notes that he called a number of witnesses at trial all
of whom testified as to his extensive ties with the Bahamas. The Appellant notes that their evidence
was not discussed by the Tax Court Judge in the course of his reasons. As such,
it is alleged that the Tax Court Judge failed to consider material evidence.
[13]
The Appellant
also alleges that the Tax Court Judge erred in conducting too general an
analysis which focuses on the whole of the period in issue. According to the
Appellant, his task was to focus on each year and to determine whether the
evidence supported the respective assessments with respect to each of these
years.
Analysis and decision
[14]
In my
respectful view, this appeal cannot succeed. It has long been established that
a person can reside in more than one place at once (Thomson v. M.N.R.,
[1946] S.C.R. 209 at p. 213 per Kerwin J.). In this case, the issue before the
Tax Court Judge was not limited to the identification of the country with which
the Appellant had the greater ties as the Appellant suggests. Rather it was, as
the Crown submitted, whether the Appellant, despite having established
residence in the Bahamas, continued to reside in Canada.
[15]
That is
the context in which the Tax Court Judge considered the Appellant’s argument
that he ceased to reside in Canada in 1997 upon taking up
residence in the Bahamas. He quoted (Reasons, para. 56)
the comments by Rand J. in Thomson, supra at p. 225 where he indicated
that residence need not be:
… a home or
particular place of abode or even a shelter. He may sleep in the open. It is
important only to ascertain the spatial bounds within which he spends his life
or to which his ordered or customary living is related. Ordinary residence can
best be appreciated by considering its antithesis, occasional or casual or
deviatory residence. The latter would seem clearly to be not only temporary in
time and exceptional in circumstance, but also accompanied by a sense of
transitoriness and of return.
[16]
The Tax
Court Judge applied the principles articulated by Rand J. and held (para. 58):
Canada was a magnet
that attracted the Hausers. After they set up residence in the Bahamas both of
Mr. and Mrs. Hauser, and particularly Mr. Hauser, continued to have a presence
in Canada. Mr. Hauser
spent over a third of a year in Canada each year. Air Canada required Mr.
Hauser to be in Canada to fly airplanes; he reported to work at Pearson Airport and
other airports in Canada. Most of his flights left from and returned to
Pearson; much of his training was at Pearson. Pearson Airport was part of
the routine of life. Mr. Hauser’s presence in Canada during the
years in appeal was not occasional, casual, deviatory, intermittent or
transitory. He was in Canada in great part because he had to be, to
earn a living.
The Tax Court Judge went on to
conclude that the Appellant remained a Canadian resident as he never divorced
himself from Canada (Reasons, para. 61).
[17]
I can
detect no error in the approach used by the Tax Court Judge to arrive at this
conclusion.
[18]
Despite becoming
a Bahamian resident, the Appellant maintained substantial ties with Canada and continued to be present
for extensive periods of time each year (see para. 9 above). The decision as to
the place or places in which a person resides in a given year is one of fact (Beament v. M.N.R., 52 D.T.C. 1183
at 1186). In this
instance, the conclusion reached by the Tax Court Judge is supported by the
evidence, and no palpable or overriding error has been demonstrated.
[19]
Furthermore,
there is no merit to the Appellant’s contention that the Tax Court Judge
ignored the evidence of witnesses who testified on his behalf. The Tax Court
Judge explains in his reasons that he did consider their testimony, but that there
was no need to set out the evidence derived thereof as the purpose of their
testimony was to establish that the Appellant resided in the Bahamas, a matter which the Crown had
conceded (Reasons, para. 2). Counsel for the Appellant further indicated that
none of their evidence contradicted any of the Tax Court Judge’s findings of
fact.
[20]
Finally, it
has not been shown that the Tax Court Judge failed to address the issue of
residence by reference to each of the years in issue. Indeed, the Tax Court
Judge specifically notes in his reasons that the issue to be decided was
whether the Appellant was a resident of Canada "in one or more years" under
appeal (Reasons, para. 52).
[21]
In a case
such as this, where the focus is on the Appellant’s mode and pattern of life,
much of the evidence transcends any given year. This, in turn, invites a global
analysis. However, the reasons make it clear that the Tax Court Judge was
mindful of his duty to assess the Appellant’s status with respect to each of
the years in issue.
[22]
I would
dismiss the appeal with costs.
"Marc
Noël"
"I
agree
John M. Evans J.A."
"I
agree
J.D.Denis Pelletier J.A."
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